NEW YORK, December 21, 1997 - Castle Harlan, Inc., the New York merchant bank, announced today that an investment partnership it manages had signed a definitive agreement to sell MAG Aerospace Industries, Inc., the worldwide leader in aircraft sanitation systems and trash compactors, to Zodiac S.A., a French aeronautical and marine equipment company.

The value of the transaction was put at $180 million, including a $3 million contingency payment if MAG reaches specific performance targets.

MAG was acquired in December 1993 by Castle Harlan Partners II, L.P., a Castle Harlan investment partnership. Justin Wender, a MAG director and Castle Harlan vice president who negotiated the sale to Zodiac, said the transaction represented a return of more than 52 percent, compounded annually, or approximately six times average invested equity.

The transaction is expected to close in the next 90 days.

MAG Aerospace, based in Compton, California, is the world's leading supplier of vacuum and recirculating sanitation systems for commercial and commuter aircraft and also has a significant share of the same market for trains and buses. Among its customers are Boeing, Airbus and Amtrak, as well as railroads in many parts of the world, including France and China.

MAG also manufactures trash compactors for commercial aircraft that are the only such devices approved by the Federal Aviation Administration.

The sale of MAG was the second major transaction announced by Castle Harlan within a week. The firm announced last Thursday the acquisition of Tidewater Compression Services, Inc., a division of Tidewater, Inc., for $360 million. Tidewater Compression is one the world's largest providers of natural gas compression equipment and services.

Zodiac is a leader in the manufacture of aircraft passenger seats, aircraft escape chutes, helicopter floats, flexible fuel tanks and parachute systems. The company is also the leading maker worldwide of inflatable boats, life rafts and water-sports products. Its headquarters is in Paris, and its shares are traded on the Paris Stock Exchange.

Castle Harlan was founded in 1987. The firm is headed by John K. Castle, its chairman and former president and chief executive officer of Donaldson, Lufkin & Jenrette, the Wall Street investment firm, and Leonard M. Harlan, Castle Harlan president, and former chairman and founder of The Harlan Company, a real estate investment and financial advisory firm.

The firm's portfolio companies have included Ethan Allen Interiors, the furniture company; Morton's Restaurant Group, the nationwide chain of upscale steakhouses; Smarte Carte, the leading airport baggage cart rental company, and Delaware Management, a major international money-management firm with assets under management of more than $32 billion. Since its founding, Castle Harlan has completed acquisitions exceeding $3 billion.